When an organization expands its operations into international markets, it hires individuals from different nations and cultures. These individuals are culturally diverse and need to be managed effectively. Numerous researches have been conducted to elucidate this important issue of the business world; each of them has some application for the modern management practices. Although workforce diversity is more an issue of the 21st Century, but massive of researches have been conducted in the late 80's and 90's.
The literature has some limitations which entice the modern researches to work on this issue and broaden the basis of knowledge for the future studies. The biggest limitation is the unclear definition of workforce diversity. Every researcher has given his own definition for this concept; however the most common definition is explained in the context of 'culture'. Most of the researches have tried to find a direct relationship between workforce diversity and organizational performance. On this point, all researchers agree that a well-managed diverse workforce contributes to an increased organizational performance and productivity. It can also become a competitive advantage for an organization over its competitors if the managers succeed in making them adopt the organizational culture. A diverse workforce can bring innovative ideas for the business, find solutions to the problems, and make better relations with the company's key stakeholders. A team that constitutes members from diverse cultures, backgrounds, and thoughts can perform better in a challenging environment.
The applications of the literature on Workforce diversity can be widely observed in the modern management practices. Today's managers are more knowledgeable and discreet in terms of managing employees from diverse areas and interests. The literature helps them in understanding the factors that affect the performance of such employees within the workplace.
Globalization has brought significant impacts on the way organizations do business internationally. From Production, Marketing, and Promotion to Human Resource Management; each and every aspect of business operations is affected by the changes in the world's business environment. Now-a-days, workforce is quite different than it was in the past. Organizations, irrespective of their size and kind of business have to hire and manage individuals from culturally diverse and geographically dispersed areas; a phenomenon called Workforce Diversity (Seymen, 2006). Therefore it has become a big challenge for business organizations to manage this modern workforce in an effective and efficient way in order to enhance its productivity and financial performance (Ongori & Agolla, 2007).
This paper critically analyzes the relevant literature on 'Managing the Modern Workforce' in terms of its theoretical construct as well as contribution and effectiveness to the International Management practices. The critical assessment of the literature on 'Workforce Diversity' covers a variety of important topics; including evolution, definition, and significance of workforce diversity, the collectivism vs. individualism concept, workforce diversity and organizational performance, and workforce diversity as a competitive advantage. The contribution of this literature to the modern management practices has been explained in the light of the aforementioned critics. The paper concludes with a brief summary of the main findings.
MANAGING THE MODERN WORKFORCE
A. Critical Assessment of the available Literature in terms of its Theoretical Construct:
The evolution of the 'Workforce Diversity' Concept:
Workforce Diversity and Diversity Management have been among the most important issues in the Industrial Relations Management since 1980s (Janssens & Steyaert, 2003). Due to an increasing trend towards globalization, international business expansion, innovation, and competitiveness, organizations were seeking to hire individuals with excellent capabilities and skills.
To fulfill this demand, organizations started hiring minorities and female employees (Darmadi, 2010). This was the beginning of workforce diversity management. But a critic can be made on the literature that it is really unknown who introduced the workforce diversity concept? Was it the 'Workforce 2000' report or some other publication that first tried to explore this concept? This is unknown and may remain unknown forever (Janssens & Steyaert, 2003).
Critics on the Definition of 'Workforce Diversity':
Ongori & Agolla (2007) believe that there are masses of literature available on workforce diversity, but they are unable to define it effectively. This is the biggest limitation of the literature available on this topic so far. In most of the articles, workforce diversity has been defined as a process by which organizations provide an equal employment opportunity to every kind of individuals, irrespective of their gender, nationality, religion, race, background, color, physical ability, ethnicity, or common beliefs and thoughts.
Workforce Diversity and Human Resource Management:
In managing the modern workforce in an international business environment, workforce diversity is the most significant issue to be dealt with. But the available literature often integrates it with the Human Resource Management policies and practices that is far much broad discipline than workforce diversity (Ongori & Agolla, 2007).
Human Resource Management deals with the recruitment, training, compensation, and motivation of the whole workforce and not necessarily includes the workforce from diverse cultures. On the other hand, Workforce diversity management only deals with the employment issues of a diverse workforce and does not account for issues of a homogenous workforce.
Workforce Diversity Management and Organizational Performance:
Ongori & Agolla (2007) also believe that an organization can enhance its productivity and performance by effectively managing its diverse workforce. But this statement is only true when that diverse workforce essentially possesses the required capabilities and skills. Also, a diverse workforce is a better source of innovative business ideas and thoughts than the workforce from the same fields of life. It means an organization with a diverse workforce can utilize its potential and make it a competitive advantage over other competitors.
This is true, but the literature does not discuss the other side of the picture. That is, there are more chances of conflicts when people with different thoughts and beliefs have to work together. Unfortunately, there is not much written on this issue except discussing the role of a Leader who has to keep all his followers directed towards one goal and resolve any issues when they arise.
The two dimensions of Workforce Diversity:
Seymen in his article 'the Cultural Diversity Phenomenon in Organizations" (2006), states that workforce diversity has two main dimensions; first is the primary dimension that accounts for the personal traits of the workforce including gender, race, color, etc., and second is the behavior that the workforce learns in its personal and professional life. Seymen believes that workforce diversity is more recognized by the primary dimensions of the workforce; thus they are more important than the secondary dimensions (Seymen, 2006).
From a critical point-of-view, this statement is quite perplexing in understanding the workforce diversity. In other words, a diverse workforce may be recognized by its personal traits within an organization, but its future in that organization solely depends upon the behavior which that workforce expresses during its services at the organization.
The Definition of 'Culture' in the relevant literature to 'Workforce Diversity':
Another critic can be put on the definition of 'Culture' in the relevant literature to workforce diversity. There is no clear definition of Culture available in the literature. Researchers believe that culture is a multi-faceted phenomenon and can not be defined effectively (Seymen, 2006). It is more than just the living, earning, spending, and behavior patterns of a society; it is basically a way to express the beliefs and thoughts by the society members to the world around them. To express the meanings of workforce diversity, it is essential that the literature must contain a clear and comprehensive definition of culture.
Diverse Workforce: Is it an advantage or an issue for a Business Organization?
Seymen (2006), also states that the researchers in the field of workforce diversity have different opinions about its significance for an organization. Some researchers believe that workforce diversity brings positive impacts to the organizational productivity and financial performance while other believe that it is one of the most complex issues which business organizations have to face in their life (Darmadi, 2010).
The first group of researchers is of the view that workforce diversity; if managed effectively, can lead to a better organizational performance with the help of innovative ideas and effort by a diverse group of employees. But the other group takes it as an issue and believes that a diverse workforce is far much difficult to manage than a workforce that constitutes members with the same personal traits. This is another limitation of the literature that most of the researchers do not agree with each other on the importance of workforce diversity for an organization (White, 1999).
Does a Diverse Workforce perform better in Collectivism or in Individualism?
Guidroz, Kotrba, & Denison, (2009) have stated that business organizations give more emphasis on Collectivism than on Individualism when it comes to workforce diversity management. Reason being; a diverse workforce performs better in a team or group that is assigned with some common goal or target.
This might be true, but if all it is seen from the perspective of individual performance measurement, an employee who…